Expatriates fleeing Hong Kong frustrate Singapore peers as home rents climb at fastest pace in a decade

·4-min read

Expatriates fleeing or relocating from Hong Kong are competing for private residences in Singapore, appeasing landlords while annoying their professional peers as rents jumped at the fastest in a decade.

Rents in core central, overall central and outside central districts in the city state ranged from S$3.20 (US$2.40) to S$4.43 per square foot per month in February, according to Singapore-listed PropNex. That translates into a 10.2 per cent to 11.9 per cent increase on an annual basis.

The pace has sustained since the final quarter of 2021, when rents surged by 9.5 per cent to 11.1 per cent to a seven-year high, according to data compiled by the Urban Redevelopment Authority. The jump is also the fastest since they climbed by 13 to 15 per cent in the first quarter of 2011.

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“There is currently very high demand for rental properties due to a confluence of factors: locals turning to the rental market due to construction delays and the influx of foreigners,” said Catherine He, head of research at Colliers Singapore. “As such, landlords can be expected to have greater bargaining power and ask for higher rents.”

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Recent reports indicated several multinational companies have shifted some of their key executives to Singapore to sidestep Hong Kong’s tough Covid-19 quarantine and travel restrictions. French lender Societe Generale is temporarily moving about a dozen traders from Hong Kong to Singapore, Bloomberg reported last month.

While Hong Kong has recently eased its Covid-19 protocols, it may not stem the brain drain. Company executives continue to depart while admission rates in several international schools have tumbled. A recent survey of 260 executives by the European Chamber of Commerce showed that nearly half of the businesses were considering moving elsewhere next year.

The economy added 47,900 jobs in the fourth quarter, according to a government report released on March 14. Employments among non-residents, which make up about 28 per cent of the total workforce, saw the first increase in two years as border restrictions were eased.

“We have seen more Hong Kong expats bid for properties,” said Victoria Garrett, head of residential for Asia-Pacific at Knight Frank, a property consultancy. “Due to the high demand locally as well as from Hong Kong, we are seeing properties let for exponentially more, compared to two years before.”

That has made 32-year-old British national Heidi Nell a bit wary about the outlook. Residents in Sentosa Cove, an upscale sea-facing residential enclave where her family has been renting a three-bedroom flat for six years, have been discussing among themselves about landlords asking for as much as S$9,500 per month, or about 45 per cent above current levels.

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“The higher fees definitely can be attributed to the influx of Hong Kong expats,” she said. “This is a contributing factor. Sentosa is a desired spot for young families, where we have easy access to the seas.”

The Oceanfront residential complex at Sentosa Cove in Singapore. Photo: Roy Issa
The Oceanfront residential complex at Sentosa Cove in Singapore. Photo: Roy Issa

Singapore landlords are relishing the prospects of boosting their rental yields, just like in 2010-11 when the local economy grew 14.5 per cent in the post-crisis rebound. The ongoing competition among expatriates has sent vacancy rate to the lowest level since the third quarter of 2020.

“It is definitely a landlords’ market. They are now being picky on tenants’ profile, length of stay and are not willing to entertain haggling by potential tenants,” said Alan Cheong, executive director, research and consultancy, Savills Singapore.

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Several tenants have found to their dismay that if they do not accede to the asking rent fast the flats are quickly snapped up, he said. “We had cases where tenants lost out after seven bidding attempts. The average is three failed biddings before they decide to take the next unit without bargaining.”

Given that Singapore is removing more Covid-19 curbs, rents are likely to further increase, according to Wong Siew Ying, head of research and content, PropNex Realty.

“As Singapore continues to open up and the labour market recovers, it could have a positive impact on the residential rental market,” she added. “Therefore, we anticipate that rents are likely to remain firm with upside potential.”

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